Massachusetts Revenue Committee Hears Debate Over Federal Tax Decoupling Bill

BOSTON — February 12, 2026 — Massachusetts Joint Committee on Revenue weighs how far to go in shielding the state from the One Big Beautiful Bill Act's $442 million hit to fiscal year 2026 revenues. Administration and Finance Secretary Matthew Gorzkowicz told the panel that without passage of House 4975, filed by Governor Maura Healey, the current-year budget would face a $442 million shortfall and the fiscal year 2027 House 2 budget would also be unbalanced. The administration's bill phases in the research and experimental expenditure deduction immediately in tax year 2026, defers four other costly federal provisions to tax year 2027, and expands the pass-through entity excise to cover the 4 percent surtax, making the overall package revenue positive by roughly $100 million annually. A coalition of labor unions — including the Massachusetts Building Trades Unions, AFT Massachusetts, SEIU Local 509, 1199 SEIU, and the Massachusetts AFL-CIO — urged the committee to permanently decouple from all five provisions, which the Massachusetts Budget and Policy Center said would preserve the full $278 million projected to be lost in fiscal year 2027 under the governor's approach. Unite Here Local 26 separately asked the committee to strip sections that would raise the casino jackpot tax-form threshold from $1,200 to $2,000, warning that roughly 65 percent of jackpots fall in that range, threatening union jobs and a problem-gaming safeguard.